Why?

Why don’t we spare a thought for those collectors of contemporary art who are now inhabiting a classic investment bubble. Forget about the share market, the sub prime crisis, the tottering financial system and the world economy.

A recent article by Ben Lewis claims the bubble is about to pop. He cites the example of British house prices which took six years to double at the start of this century, contemporary art managed it in one, 2006-2007. Over the same period old masters only went up 7.6% and 17th to 19th Century watercolours actually lost value. In emerging economies the growth was eye watering; China was up 983 per cent in one year, in Russia 2,365 per cent in five years, while its stock market only increased by 300 per cent.

So spare a thought for the nouveau rich who fuelled the bubble and who have seen the value of their other assets go into freefall, their art collection is due to follow.

As Lewis puts it “like the Dutch merchants and their tulips, the obsession of the new rich with contemporary art is likely to be remembered as the epitome of the vanity and folly of the age. The bulbs are still in the ground but the spades are poised.”